By Bronwyn Ackland, Partner and Madison Hornabrook, Lawyer

This case provides important lessons on retaining legal professional privilege (LPP) over documents in possession of a non-party. The plaintiff served the defendant’s legal representatives, Gilchrist Connell (GC) a notice of non-party disclosure to which GC objected to on the grounds of LPP. McCafferty J discussed the Court’s role in exercising discretion to inspect privileged documents and the application of the ‘dominant purpose’ test in circumstances where GC’s evidence was inadequate to establish privilege over all documents.

Factual Background

The plaintiff’s daughter attended one of the defendant’s kindergartens. The defendant Creche and Kindergarten Association Limited’s kindergartens (C&K) are not a party to this application. While in C&K’s care, the plaintiff’s daughter swallowed a button battery, and the plaintiff seeks damages for psychological injuries.

Two days after this incident, C&K’s insurance broker contacted GC requesting urgent legal advice. A retainer was executed on the same day. Workplace Health and Safety Queensland and the Department of Education Queensland were investigating the incident. Of key importance to the determination of LPP was the fact that GC was retained not only to provide legal advice to C&K but also to conduct the investigation requested by the Department and prepare the resulting report.

Issue

The notice of non-party disclosure to which GC objected was as follows:

“A copy of your file relating to your retainer to prepare an investigation report for the Department of Education on behalf of [C&K] including all correspondence with [C&K], letters of instructions [sic] and briefs from [C&K], all file notes, notes and records of interview with the persons interviewed, any recordings of the interviews with each of those persons, diary notes, memorandum [sic] and any other material relating to work undertaken to prepare the report which itself is dated Monday 11 October 2021.”

A GC solicitor with day-to-day carriage of the file swore an affidavit in support of the firm’s claim to LPP and created a spreadsheet recording the disputed documents. The affidavit categorised the documents into 10 categories but did not identify individual documents.

The issue for the Court was whether the evidence was adequate to establish a claim of LPP. And if so, whether the Court should exercise its discretion to inspect the disputed documents.

Decision

In this case, the Court’s discretion to inspect the privileged documents was exercised. McCafferty J emphasised that it should not be assumed that a party asserting LPP should rest on the expectation that a court will too readily inspect documents. The general rule is that the Court will not inspect large amounts of documents without supporting evidence as to the claim to LPP.

However, upon inspection, the key issue for the Court to consider is what is the dominant purpose of the document.

Citing Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49, the Court highlighted that “the relevant inquiry is whether at the time it was brought into existence the communication was for the dominant purpose of giving or obtaining legal advice or assistance or for the dominant purpose of use in existing or reasonably anticipated legal proceedings, including quasi-judicial and regulatory proceedings”.

If a document is made for multiple purposes, a claim for LPP must establish legal advice as the document’s dominant purpose. Dominant purpose means of greater importance than any other purpose. Consequently, there is a difference between dominant purpose and substantial purpose, the latter not capable of attracting LLP. Indeed, McCafferty J points out that where two purposes are of equal weight, neither is dominant.

The Court discussed how, although an affidavit is not prescribed by the UCPR (Qld) to support a claim for LPP, this does not obviate the need on the part of the party making the claim to LPP to adduce sufficient evidence in support of the claim. For a party to discharge this onus, the deponent must have perused each of the documents for which a claim to LPP is made and the deponent must provide evidence about the circumstances in which the document or communication was brought into existence. There may be compelling reasons as to why a party claiming LPP has been unable to adduce adequate evidence, and if that is the case, the party should explain why.

In determining whether the dominant purpose of providing legal advice is demonstrated, the Court commented on the evidentiary failures of the defendant’s evidence. Namely that:

• The affidavit did not make it apparent how the spreadsheet of privileged documents was in fact prepared.
• There was no evidence as to who was involved in the spreadsheet’s preparation.
• The deponent does not say he has received each of the documents.
• The deponent does not identify or explain by reference to individual documents why it is asserted that the document was created for the dominant purpose of providing legal advice.

Importantly, in itself, the failure of a party asserting LPP to put adequate evidence before the court to determine the issue is relevant to whether the court should exercise its discretion to examine documents to resolve the question of LPP.

Following inspection, the Court held that the evidence was sufficient to discharge the onus in some respects, but in other respects, the evidence was inadequate. In particular, the Court held that draft witness statements (prepared after the report from GC was finalised) were not made for the dominant purpose of the provision of legal advice. Draft witness statements can be used for a multitude of purposes, and in this case, the claim of LPP failed. Furthermore, the Court held that two statements that were prepared earlier (as part of the investigation process) but provided after the report from GC was finalised, were not privileged documents.

Key takeaways

• A mere sworn assertion that the documents are privileged does not suffice. A party must reveal the relevant characteristics of each document in respect of which LPP is claimed, and must do so by admissible direct evidence, not hearsay.
• A document will fail to attract LPP if objectively its legal purpose did not prevail over competing substantial purposes.
• The concept of legal advice is wide. It includes drafts, notes, memos, even material existing for the purpose of communication to a lawyer, notwithstanding that it did not get communicated to the lawyer.
• The sheer involvement of lawyers, even intimate involvement and having a retainer, does not determine the issue of LPP.
• Reports made at the request of Departments via an insured may not satisfy the dominant purpose test to claim LPP.